Q: Have you decided what you want to do and whether or not you want to tender? Were you holding the stock when the past two ADRs happened?

Purohit: I have been holding it since maybe 1985. But for this ADR, I do not think, I am going to tender any of these shares. The main reason is – Infosys Technologies is not a weak company. This is a company with robust growth and even the 10% difference that we see today is not that much.

And even if the difference goes up to 30-40%, I do not think I will decide to tender these shares because of the kind of growth I can see considering our market, along with the country's economic situation, which is tremendous.

So the growth of these shares will be much better then tendering into the NASDAQ market. So I do not think I will be tendering any of these shares.   

Q: As an analyst, what do you see as the likely response to the sponsored ADS and what are the ramifications of the stock going over to the US market and less of the liquidity remaining here?

Shah: As one of our investors said, it is like selling of the Taj, which is a pretty strong statement to make. On a more serious note, what the management has said is that they would like more visibility in the US market, so that they get an entry to the Nasdaq 100. They obviously seem quite serious about this whole thing. They are already quite well known as a company in the US and are extremely serious about it in that geography. It is obviously the largest market for IT services.

As far as demand is concerned, there are no issues going forward. I am not really convinced about these stories being sold out to foreigners going forward. It still continues to remain a professionally run company.

At the outset, I would like to specify that I would probably agree with most of our investors that they would rather not tender their holding in this company because first of all, the premium has reduced.

Second, if you look at it from a taxation angle, this will be treated as an off market transaction. As a result of that, they will be charged capital gains tax. In that sense, the premium is not that appealing for any way to actually surrender one's shares. I am pretty convinced that over the longer term, you will make better returns than if you would surrender this for short term gains.

Q: In the past, how high has retail participation been in this sort of process, for Infosys in specific?

Shah: If you look at the last issue, it was oversubscribed about 8 times. Again one needs to look at the circumstances; last time it was trading at about 40-50% premium to the local share and now that difference has reduced considerably. And given the fact that the float will increase in the US, it is more likely that the premium should reduce even further going forward. 

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